In the current Australian economic landscape, businesses are grappling with several significant challenges:
Elevated interest rates
High inflation
A rising number of business insolvencies.
Gerry Harvey, Chairman of Harvey Norman Ltd and a 60-year veteran of the retail industry, has expressed concerns about Australia's economic trajectory. He warns that ongoing government expenditures could perpetuate high interest rates and inflation for at least the next five years.[i]
The Australian Small Business and Family Enterprise Ombudsman, Bruce Billson, has highlighted troubling trends:
A 3.5% decline in small business conditions over the past year
A two-year consecutive downturn in the small business operating environment
A decrease in economic activity generated by small businesses, now accounting for 33% of GDP, down from 40% in 2006
Employment in small businesses has fallen to 42% of the private sector workforce, compared to 53% in 2006.
These statistics underscore the mounting challenges faced by business owners and the professionals who support them.[ii]
Australian accounting software provider, MYOB, has observed that many business owners lack a solid grasp of fiscal management. Issues identified include:
Inadequate debtor control systems
Misunderstanding of supplier payment terms
Insufficient planning for tax obligations
New business owners encountering significant challenges after approximately six months of operation.
Are You Getting the Advice Your Business Needs to Survive and Thrive?
With high interest rates, inflation and increasing business failures, now is not the time for business owners and business leaders to rely solely on annual accounts and tax returns. The businesses that will withstand these economic pressures are those that take a proactive approach — seeking strategic financial and commercial guidance beyond compliance.
Industry leaders and economic experts are signalling the challenges ahead. The question is, are you prepared? A fresh perspective on your business strategy could make all the difference.
Now is the time to engage with advisors who can help you navigate uncertainty and position your business for long-term success. Contact Collins Hume’s Strategy360 today to explore how we can support your business with tailored financial insights and commercial strategies.
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